blogging on issues relevant to a B-school business law course

The Patent Fight Between Qualcomm and Apple

Posted by Chengjie Chu. ﻿

The business dispute between Qualcomm and Apple has a long history, focusing on patents. In fact, Apple and Qualcomm were once close business partners. However, the quarrel between Apple and Qualcomm stems from the fact that Apple provided relevant correct information to the South Korean government when it was investigating Qualcomm, which made the situation of Qualcomm become very awkward at that time. Because of this, Qualcomm withheld $1 billion in royalties it had promised to pay Apple. The matter was also investigated by the federal trade commission of the United States. After verification, Qualcomm has paid billions of dollars of kickbacks to Apple in exchange for the exclusive chip purchase agreement signed by Apple in 2011 and 2013 to exclude competitors. In fact, this kind of transaction is a kind of a monopoly, which is very unfair to other downstream enterprises. Moreover, this kind of transaction is illegal in Europe, America, Japan, China or Taiwan.

On December 10, 2018, China’s Fuzhou intermediate people’s court granted Qualcomm to Apple’s four subsidiaries in China in the two preliminary injunctions to limit Apple to a total of seven related products in China and to stop selling immediately, because Apple’s seven products infringe the patents of Qualcomm, as well as in China imports and sales. And the commercial war continues. We don’t know what result will be.

Both for enterprises and individuals, the protection of patents is very important, and the legal punishment for patent infringement is also very serious. The reason for the long and wide commercial war between the two transnational corporations on the patent issue may lie in the combination of the two corporations in the field of modern communication, which makes it difficult to solve some problems with a fixed legal formula, and the patent dispute will become very difficult. And other legal issues arising from patents, such as monopoly and corruption, will become a major uncertainty in the debate.

Chengjie is a student at the Stillman School of Business, Seton Hall University.